Correlation Between Genelux Common and ProMIS Neurosciences

Can any of the company-specific risk be diversified away by investing in both Genelux Common and ProMIS Neurosciences at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Genelux Common and ProMIS Neurosciences into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Genelux Common and ProMIS Neurosciences, you can compare the effects of market volatilities on Genelux Common and ProMIS Neurosciences and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Genelux Common with a short position of ProMIS Neurosciences. Check out your portfolio center. Please also check ongoing floating volatility patterns of Genelux Common and ProMIS Neurosciences.

Diversification Opportunities for Genelux Common and ProMIS Neurosciences

0.64

Correlation Coefficient

Genelux Common  ProMIS Neurosciences

Poor diversification

The 3 months correlation between Genelux and ProMIS is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Genelux Common and ProMIS Neurosciences in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ProMIS Neurosciences and Genelux Common is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Genelux Common are associated (or correlated) with ProMIS Neurosciences. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ProMIS Neurosciences has no effect on the direction of Genelux Common i.e., Genelux Common and ProMIS Neurosciences go up and down completely randomly.

Pair Corralation between Genelux Common and ProMIS Neurosciences

Given the investment horizon of 90 days Genelux Common is expected to under-perform the ProMIS Neurosciences. But the stock apears to be less risky and, when comparing its historical volatility, Genelux Common is 1.01 times less risky than ProMIS Neurosciences. The stock trades about -0.07 of its potential returns per unit of risk. The ProMIS Neurosciences is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  101.00  in ProMIS Neurosciences on October 11, 2024 and sell it today you would earn a total of  1.00  from holding ProMIS Neurosciences or generate 0.99% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Genelux Common  vs.  ProMIS Neurosciences

Genelux Common

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Genelux Common are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Genelux Common may actually be approaching a critical reversion point that can send shares even higher in February 2025.

ProMIS Neurosciences

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in ProMIS Neurosciences are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very fragile primary indicators, ProMIS Neurosciences may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Genelux Common and ProMIS Neurosciences

The main advantage of trading using opposite Genelux Common and ProMIS Neurosciences positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Genelux Common position performs unexpectedly, ProMIS Neurosciences can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in ProMIS Neurosciences will offset losses from the drop in ProMIS Neurosciences' long position.

The idea behind Genelux Common and ProMIS Neurosciences pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

Check out your portfolio center.

Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .